A threat worse than Boko Haram: Defusing the unemployment time-bomb

Data on unemployment are not only unreliable but, being snap-shots representing a particular time frame, they capture neither the dynamic reality, nor its full implications. As a guide to policy, unemployment estimates, as currently provided, are almost useless. They understate the problem. Right now, as already pointed out in the first part of this write […]

Data on unemployment are not only unreliable but, being snap-shots representing a particular time frame, they capture neither the dynamic reality, nor its full implications. As a guide to policy, unemployment estimates, as currently provided, are almost useless. They understate the problem.
Right now, as already pointed out in the first part of this write up (Daily Trust 24/5/2016), out of a work force of 78.4 million, about 24.5 million are officially defined as either unemployed or engaged in some menial part-time jobs. Another the 27.5 million are effectively “out of the work force”, meaning they chose not to work, or are tired of searching for one. Thus 52 million are either not working, are tired of searching for work, or are engaged in temporary menial jobs for pittance. Women and the youth are obviously the worst hit. Even among those who currently have jobs, many earn less than a decent wage, and define themselves as unemployed because they are “just managing” the jobs they now have, and are therefore terribly frustrated. They spend a significant part of what they earn patronising merchants of miracles, hoping for “deliverance”, searching for well-connected patrons to help them secure a better job, hitting some online jackpot, or winning a dancing competition.
In other words, most of those classified as “employed” would dispute your classifying them as such. The problem may be technical, but is nevertheless fundamental. Statisticians do not consider how much you are paid, once you are paid something then you are employed. But that is exactly the problem: people working for peanuts do not consider themselves employed, but just marking time, trying to stay alive till they get a “proper” job, one which pays better. This we have seen time and time again. A ministry, department or public agency advertises for 5,000 vacancies, and over a million applicants show up, often with deadly implications for crowd control. These are not your statistical unemployed “job seekers”, but mostly young people who work for wages and salaries that cannot sustain them. They are classified by NBS as “employed” but they do not consider their jobs as employment. The petrol attendant filling your tank, the shop assistant that sells you provisions, the security guard frisking you for explosives before you enter some public place, all earn between N10,000 to N15,000 per month, with no additional allowance for transport or rent, even though he or she has a diploma from some “government approved” polytechnic. He or she works 8 hrs or more a day for the privilege of earning less than a Dollar and fifty cents a day, what everyone considers the universal poverty line.
 This reality is clearly unstable and unsustainable. It means we must not only provide for those without any job whatsoever, but also for those currently “employed” in jobs that pay “take-home” pays which effectively take them nowhere.
We have argued that to even maintain the current level of unemployment we need to create about 1.5 million new jobs a year, against the 150,000 to 200,000, which is the best estimate of our performance at present. The unemployment situation is therefore worsening. These are today’s realities.
However, our population is expanding at over 4 million annually, and most will eventually enter the labour market. To begin to address this crisis we should aim at creating at least 4 to 5 million new jobs annually to bring our unemployment down to the Sub-Saharan Africa’s average of 4 percent, if we are to avoid a social explosion.
Things are clearly getting more complicated. Everything is changing so fast, and yet we are fixated on the present. We started the year with about 185 million Nigerians. Every hour we are adding some 850 little ones into this pool. About 280 of our citizens would die during the hour. On average, we are increasing by 570 people ever one hour, or some 13,491 every day. This means some 4.92 million every year, after considering migration. Currently we are the seventh most populated country on earth, and our numbers will reach 263 million by 2030. The year 2050, if things continue as they are, will see us overtaking the USA, and becoming the third globally in terms of population with about 400 million people. It is becoming clear that, given current trends, within a generation, one out of every 20 inhabitants of our planet in 2056 will be a Nigerian, unless the elites succeed in their current preoccupation of breaking us up into ethnic enclaves.
The problem is not just in the numbers, but the characteristics of this expanded population. The vast majority will be under 18, and though this could potentially be beneficial, it is also a challenge. As most of the world’s population is stagnant and ageing, countries with a youthful population could see what some have termed a “demographic dividend”, benefiting from a growing work force. Without adequate preparations, this demographic trend can also lead to disaster. At present, most of the youth are poorly educated, malnourished (stunted even) and totally unprepared for their present or future. Marginalised, dysfunctional, jobless (and often unemployable), bitter and beyond the control of their mostly poor and unemployed parents they are at the same time developing tastes and expectations beyond what present economic arrangements can provide for. Even if we are able to provide them with food, clothing, shelter, schooling and healthcare the biggest challenge will still remain – how do we put them to work?
Are they likely to be satisfied with their lot? Will they look on adoringly as we throw peanuts at them? Do we have a strategy for their future beyond tokenism? Only about one out of every ten employed persons are in the formal sector, defined as organisations that employ 10 people or more, mostly government ministries or agencies. The private sector, though it is making so much money, actually employ very few. Agriculture is not attractive, manufacturing is shrinking and the SMEs are stunted.  Ultimately, these SMEs could be the solution but, believe it or not, the Small and Medium Enterprise Development Agency, designed to revolutionise the sector, has a total allocation of about N2 billion in this year’s budget, while the CBN, Bank of Industries, some commercial banks and even the Presidency dabble into areas they have no competence in, throwing hundreds of billions at the problem. Preparing entrepreneurs, developing skills, creating viable enterprises that could compete locally and globally is too serious a business to be left to politicians of conventional money lenders.
Unless we sit up, the unemployment bomb can explode in our face, consuming us all. Petrol has gone up in response to the effective devaluation of the Naira. The devaluation may continue unless we produce the goods and services we require right here at home. Mere devaluation would not bring in more Dollars, just greater competition over a shrinking pool. Real wages will fall making more and more dissatisfied with their current jobs. While we celebrate the relative peace resulting from the crippling of Boko Haram, and while we support the war against corruption and impunity, this nation can only work when we get the people working. Thus far, the government seems satisfied with its own functionaries and regulators taking decisions on a day-to-day basis, supervising themselves. Neutral, dispassionate advice based on scholarly and strategic studies are anathema. This is truly disturbing. Scholars, employers, labour leaders, politicians, financial experts, civil society organisations, government functionaries must all put heads together to find lasting solutions.